Stock Upgrades, Downgrades From TheStreet.com Ratings

Each business day, TheStreet.com Ratings updates its ratings on the stocks it covers. The proprietary ratings model projects a stock's total return potential over a 12-month period, including both price appreciation and dividends. Buy, hold or sell ratings designate how the Ratings group expects these stocks to perform against a general benchmark of the equities market and interest rates.

While the ratings model is quantitative, it uses both subjective and objective elements. For instance, subjective elements include expected equities market returns, future interest rates, implied industry outlook and company earnings forecasts. Objective elements include volatility of past operating revenue, financial strength and company cash flows.

However, the rating does not incorporate all of the factors that can alter a stock's performance. For example, it doesn't always factor in recent corporate or industry events that could affect the stock price, nor does it include recent technology developments and competitive dynamics that may affect the company.

For those reasons, we believe a rating alone cannot tell the whole story, and that it should be part of an investor's overall research.

The following ratings changes were generated on March 20.

DST Systems (DST Quote), which provides information processing and software services, has been downgraded to hold. Strengths such as revenue growth, a reasonable valuation and a solid financial position are balanced by unimpressive growth in net income, poor profit margins and weak operating cash flow. For the fourth quarter, revenue increased 2% year over year to $577.4 million, while earnings per share fell to 92 cents from $1.15. DST's debt-to-equity ratio is somewhat low at 0.92, but its quick ratio of 0.43 is very weak and demonstrates an inability to pay short-term obligations.

Net operating cash flow has significantly decreased year over year. Net income has decreased 21% from the year-ago quarter. DST Systems had been rated buy since May 2, 2006.

Nicor (GAS Quote), a distributor of natural gas, has been downgraded to hold. Revenue growth, an attractive valuation and a solid financial position are countered by disappointing return on equity, poor profit margins and weak operating cash flow. For the fourth quarter, revenue increased 9.7% to $919.5 million, while earnings per share declined to $1.22 from $1.29.

The company's debt-to-equity ratio is somewhat low at 0.92, but its quick ratio of 0.44 is very weak and demonstrates a lack of ability to pay short-term obligations. Net operating cash flow has decreased 15% to a loss of $117.2 million. Return on equity has slightly decreased to 14.3% from the year-ago quarter. This implies a minor weakness in the organization. With a price-to-earnings ratio of 11.18, the stock is cheaper than others in its industry. Despite the cheap valuation, we do not believe the stock warrants further investment at this time.

Sina (SINA Quote), which operates as an online media company in China, has been downgraded to hold. Strengths such as impressive EPS growth and robust revenue growth are balanced by a decline in share price during the past year. For the fourth quarter, EPS improved 45% year over year to 29 cents. The company has demonstrated a pattern of positive earnings per share growth over the past two years, and we feel that this trend should continue. For 2008, the market expects an improvement in full-year EPS to $1.44 from 97 cents a share. At 62%, the company's gross profit margin is rather high, but its net profit margin of 25% trails the industry average.

After a year of stock price fluctuations, the net result is that the share price has not changed very much. The stock's P/E of 34.32 means it now sells for less than others in its industry. However, this is not reason enough to justify a buy rating at this time. Sina had been rated buy since Nov. 27, 2006.

StatoilHydro (STO Quote), a petroleum and petroleum products company, has been downgraded to hold. Robust revenue growth, good cash flow from operations and expanding profit margins are held back by unimpressive growth in earnings per share. For the fourth quarter, revenue rose 41% year over year to $26.26 billion, while EPS decreased to 33 cents from 98 cents.

For 2008, the market expects a contraction in earnings to $3.05 from $3.63 in 2007. Net operating cash flow has significantly increased to $4.95 billion and is growing faster than the industry average. The company's debt-to-equity ratio of 0.28 is very low but exceeds the industry average.

Its quick ratio of 0.70 is somewhat weak and could be cause for future problems. With a P/E of 7.76, the stock is significantly cheaper than the industry average. StatoilHydro had been rated buy since TheStreet.com Ratings initiated coverage on March 17, 2006.

CIT Group (CIT Quote), a commercial finance company, has been downgraded to sell. For the fourth quarter, revenue increased 7.6% year over year to $2.04 billion, but earnings per share swung to a loss of 69 cents from a profit of $1.28. For 2008, the market expects an improvement in full-year EPS to $3.89 from a loss of 62 cents in 2007. The company's debt-to-equity ratio is very high at 10.60, implying very poor debt management. Return on equity has greatly decreased year over year. This signals major weakness.

Shares have tumbled 77%, in the past year. The stock's sharp decline last year is a positive for future investors, making it cheaper than most others in its industry. But due to other concerns, we feel it is still not a good buy right now. CIT Group had been rated hold since July 19.

Additional ratings changes from March 20 are listed below.

Ticker	Company Name	Change	New Rating	Former Rating
BPFH	BOSTON PRIVATE FINL HOLDINGS	Downgrade	Sell	Hold
CIT	CIT GROUP INC	Downgrade	Sell	Hold
DST	DST SYSTEMS INC	Downgrade	Hold	Buy
FFG	FBL FINANCIAL GROUP INC	Downgrade	Hold	Buy
INOD	INNODATA ISOGEN INC	Downgrade	Hold	Buy
GAS	NICOR INC	Downgrade	Hold	Buy
SINA	SINA CORP	Downgrade	Hold	Buy
SMTS	SOMANETICS CORP	Downgrade	Hold	Buy
STO	STATOILHYDRO ASA	Downgrade	Hold	Buy
TNP	TSAKOS ENERGY NAVIGATION LTD	Downgrade	Hold	Buy
MOH	MOLINA HEALTHCARE INC	Downgrade	Hold	Buy
BIDU	BAIDU.COM INC -ADR	Downgrade	Sell	Hold
SPWR	SUNPOWER CORP	Downgrade	Sell	Hold
EIHI	EASTERN INSURANCE HLDGS INC	Upgrade	Hold	Sell